Steve Zito, MS Fin/BS Econ Wharton School, HTML Writers Guild
uses economic and technical analysis to forecast the direction of the stock market. The views in this newsletter are opinions only, and should not be relied upon as advice on investment decisions.
Nasdaq Mar.10 Nasdaq Mar.3 INDEX **INTEL REVIEW** EMAIL

NASDAQ COMPOSITE
INDEX closed 1940.71

Will Nasdaq RALLY off OVERSOLD level?
Thu., Mar.15, 2001

******************Commentary*******************
Mar.15. Nasdaq lost 5.4% since Mar.10 when I forecasted a rebound. What happened? A week ago, INTEL warned of a revenue shortfall, and sent the Nasdaq below 2000 on Monday. There WAS a rebound Tuesday, BUT IT FAILED! Today Oracle CEO Larry Ellison said that visibility is limited (translate: it's not his fault), yet the pipeline looks good (translate: customer orders postponed Feb. 28 are waiting to be postponed again), and there will be big layoffs referring to future laid off employees as "HEADS". Anticipating these LAME excuses, have exited ORACLE in the Model Portfolio. Today's sell-off took Nasdaq short-term stochastics (10-day chart) to yet another oversold bullish condition at 1.46/39.91% (vs 8.66/6.06%). Intermediate stochastics have incredibly eased to 5.59/23.75% (vs 4.11/26.11%). Longer-term (2-year Nasdaq chart) stochastics are the most over-sold I've seen at 1.85/27.90% (vs 1.29/28.98%). What the very over-sold data readings forecast is an incredible Nasdaq rally, steep enough for the classic V-shaped bottom. The question is: WHEN? Maybe Monday/Tuesday. Confirmation of a rebound will happen if the Nasdaq breaks out and closes above resistance at 2060, most likely after options expiration. INTEL stochastics falling at 15.31/45.92% (vs 35.85/41.71%). Intel has tested $28 five times. Lehman Brothers' Dan Niles predicted 50% lower prices for INTEL next summer. This is the same analyst who recommended INTEL last year at $70 for a move to $95. Ought to take a Finance course on stock valuation. INTEL is building a base at $28, headed higher for my forecasted $39 target price. In sympathy with a weakness in rival Oracle, MICROSOFT is still correcting from a 60% rise in Jan. (to $65). Stochastics are over-sold enough for an end to its correction, at 21.71/43.39% (vs 28.71/65.53%). Support $51 was tested. CISCO eased 1.5% since Mar.10. Stochastics rising and now bullish 29.52/22.64% (vs 4.46/16.80%). CSCO up 15% in one day on Nasdaq's failed rally attempt Tuesday. ORACLE crashed again. Exited it in the Model Portfolio. Oracle stochastics are still plunging at 4.41/16.21% (vs 8.33/21.11%). MACD never turned positive, management is on TV making EXCUSES. I made a mistake buying it. Worldcom very bullish since Mar.10. WCOM stochastics are up again at 77.36/42.17% (vs 55.24/41.12%). Overhead resistance at $18. DELL stochastics neutral at 55.21/65.28% (vs falling 49.09/61.02). RSI at 52.79 pulled up by this month's 10% rally. Dell is a trading "buy" at $21. Bad news Thursday from COMPAQ should hit PC makers. Nasdaq has fallen over 1% per day for the last 14 trading days, or 14.2% since Feb.24. In that period, Intel is down 6.9%, Cisco 24.2%. Capitulation in INTEL and CISCO make these the top 2 candidates for substantial recovery this month. New earnings WARNINGS from ORACLE CFO will send it to $8.00.
U.S. dollar is overvalued. Diversify with CANADIAN STOCKS!
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